Traditional loans require at least a 620 credit score, no more than 45% debt to income ratio, and a down payment of at least 3%. This can make it difficult for a potential homebuyer to get a loan as many people don't have a high credit score, low debt and a large amount in savings for a down payment when they're ready to buy a home. —
According to industry statistics in 2013, 43% of applicants with less than perfect credit were denied a mortgage. Those who were most likely to be approved had a near-perfect credit score, more than 5% down payment available, and a very low income to debt ratio. Many potential homebuyers who applied for conventional loans found it time-consuming to search through potential loans to determine which one is going to be the best one to apply for and which one the person has the highest chance of being approved for.
Gerry Nicodemus, spokesperson for AMCAP Mortgage - North Houston, understands this and recently commented, "FHA loans can be easier to qualify for and gives many prospective homebuyers the chance to get the mortgage they need without perfect credit, a large down payment, and a low income to debt ratio."
According to Nicodemus, FHAs accept applicants with a FICO score of 580, as much as 57% debt to income ratio, and a minimum of 3.5% down payment. Furthermore, they also allow people to use monetary gifts such as grants for the down payment. "As an approved FHA lender," he states, "we do all of the processing for the FHA loan on our own and are committed to making the entire process as simple and painless as possible."
The lower fha loan qualifications mean a person who might not be able to be approved for a conventional loan will be able to apply for FHA loans and have a much higher chance of being approved. This appeals to many people who are interested in purchasing their first home. Instead of searching through the private lenders and hoping to find one who will approve them, consumers are able to apply for one of these loans.
As long as home buyers have an acceptable credit profile, at least 3.5% down payment and they can repay the mortgage according to HUD guidelines, they should be able to be pre-qualified for a mortgage. Nicodemus concludes, "Once they are pre-qualified, they can start looking for the perfect home with confidence they'll be able to purchase it."
About AMCAP Mortgage:
AMCAP Mortgage is a registered Mortgage Banking entity with the Texas Department of Savings and Mortgage Lending with all of the necessary licenses to hold and maintain lending offices in ten states. They are committed to providing excellent customer service and helping ensure the entire process is efficient and pleasant. The firm looks forward to helping any potential homeowners reach their dream of buying and owning their own home.
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